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Councils and central government failing to secure safe housing in private rented sector, spending watchdog finds

Tenants in the private rented sector are suffering from poor safety standards due to ineffective regulation and enforcement from local authorities and the Department for Levelling Up, Housing and Communities (DLUHC), a report from the National Audit Office (NAO) has found.

The report, Regulation of private renting, found that an estimated 13% of private rented homes have at least one 'category 1 hazard', which means a serious threat to health and safety, compared to 10% of owner-occupied homes and 5% of social housing.

In addition, the report highlighted that 23% of private rented homes are classed as 'non-decent', meaning they pose an immediate threat to a person's health, are not in a reasonable state of repair, lack modern facilities or are not effectively insulated or heated.

The NAO said the DLUHC has taken a "piecemeal approach" when introducing legislative changes aimed at improving standards for private rented tenants. It added that local authorities are not using enough regulatory tools to help.

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In recent years the DLUHC has introduced changes such as a mandatory redress requirement for letting agency work, a ban on charging letting fees to tenants, and temporary restrictions on evictions during the Covid-19 pandemic. However, the NAO stated that DLUHC does not yet have a strategy for what it wants the regulation of the sector to look like as a whole.

The Department's approach is also "limited" by gaps in its data gathering, which would otherwise show which problems are occurring and where, the NAO said.

According to the NAO, the DULHC lacks data on key issues where regulatory action may be required – including harassment, evictions, disrepair that is not being addressed, or on the costs to landlords of complying with obligations.

The Department also has limited data on what tools and approaches are used by local authorities, and therefore cannot meaningfully analyse which are more effective at improving compliance and protecting tenants, the report stated.

The NAO said there is little evidence of local authorities making use of certain regulatory tools such as banning orders and penalty notices. Only ten landlords and letting agents have been banned by councils under the Housing and Planning Act 2016.

The report also highlighted the inconsistent approaches taken by local authorities, in which some inspect almost none of their private rented property while others inspect a large proportion.

According to the NAO, the system currently relies heavily on tenants enforcing their own rights. This means that tenants must negotiate with landlords directly or take action through the courts, which can be costly.

The DLUHC has said it plans to introduce reforms to the private rented sector and has committed to producing a white paper in 2022. In response, the NAO has recommended that the DLUHC defines an overall vision and strategy for the regulation of private renting.

The NAO recommended that the Department should review whether current dispute resolution arrangements for private renters are appropriate and accessible for all tenants and improve its understanding of the experiences among private renters to inform how support is targeted at those most in need.

Gareth Davies, the head of the NAO, said: "The proportion of private renters living in properties that are unsafe or fail the standards for a decent home is concerning. The government relies on these tenants being able to enforce their own rights, but they face significant barriers to doing so

"The Department for Levelling Up, Housing and Communities should improve the quality of its data and insight into the private rented sector, so that it can oversee the regulation of the sector more effectively. It should develop a clear strategy to meet its aim of providing a better deal for renters."

Cllr David Renard, Local Government Association housing spokesperson, said new licensing powers and resources for councils to build more homes would be vital in imprroving housing security.

He said: "Councils want all tenants to be able to live in safe and secure, high-quality housing and can play a key role in driving up standards in the private rented sector.

"With more powers such as the freedom to establish landlord licensing schemes, councils would be better placed to support a good quality local private rented offer in their communities."

Cllr Renard added: "Where councils need to take action, some issues may be resolved without the need for inspection and enforcement is a last resort when all other options fail.

"Longer term, the key to increasing housing security is to address the unaffordability of housing. Giving councils the powers and resources to build 100,000 social homes for rent a year would go a long way towards tackling this urgent issue."

Adam Carey

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